Inventory Valuation Method is the process of assigning a monetary value to a company’s raw materials and finished products. In essence, it involves determining the worth of inventory in its current state. This valuation can be done using various methods like First-in, First-out (FIFO), Last-in, First-out (LIFO) or Average Cost. Each of these methods uses different assumptions about sales and profits to calculate the total value of inventory stored in warehouses. The choice of the method depends on factors such as company profit goals, production goals, pricing objectives, and accounting regulations. With proper evaluation, businesses can make well-informed decisions regarding their inventory investments, leading to greater efficiency and profitability.